Skip to main content

tv   Fast Money  CNBC  November 4, 2015 5:00pm-6:01pm EST

5:00 pm
stephanie link and mike sant olie with me today. on "fast money," melissa lee what is on tap. >> an investigation into the drug pricing and the two senators that are leading the investigation. >> straight over to you guys. >> "fast money" starts right now. live from the nasdaq market site overlooking time square, i'm melissa lee. your panel on the board. tonight on "fast," time warner shares tanking. could it spell a tragic kingdom for disney that reports tomorrow. and janet yellen shocking the market by hinting at a december liftoff and a trade that could make you money if the fed does or doesn't move in december. and biotech stocks falling offer a formal investigation into drug pricing at four big pharmaceutical companies. the senators leading that charm, republican suzanne collins of maine and democrat claire mccaskill of missouri will join us live from capitol hill. they will tell us just how far they intend to go. but first to the biggest story of the night and that is facebook beating the top and
5:01 pm
bottom lines. the stock is popping in the after hours. crossing the $300 billion market cap level. joining apple, microsoft and alphabet with the only others of that size. we just spoke to coo cheryl sandberg a moment ago. what is the latest? >> the growth and ad revenue and user engagement shows the investment in ad formats in the build to measure return on investment paying off. and i know facebook doesn't provide guidance, here is what sandberg said when i asked about how the fourth quarter is going so far. >> we're feeling really pleased with our ads business and the strength of advertisement demand across the board and that is what you see in the results this quarter. going into the holiday season we know how important the season is for clients and what we work on with them is focusing on business results. we want to be the best dollar and the best minute they spend on ads to dry the highest roi and measure that not with the
5:02 pm
add metrics but with moving products off shelves, cars off lots. >> facebook doesn't break out revenue from the different products but it sounds like video ads and instagram ads both helped drive the upside surprise this past quarter. >> this is the first quarter where the instagram ad offering has been as robust as it is now. a lot of improvements that happened this quarter, including self-service rollout. that is a major step change for instagram in terms of the product we are offering to the market. >> facebook's earnings call is kicking off right now with sandberg and ceo mark zuckerburg. i'll be back with the big headlines from the call. melissa. >> julia, thanks for that. tim seymour, where would you go on that with the valuation. >> after market trading, it is hard to know. not easy to do. the numbers are fantastic. what impresses me is the ad
5:03 pm
revenue growth. 57%. a company this big that is growing that fast extraordinary. i think you have one more quarter here and it is a place where ultimately investors have played into this very long. very few people are short. i'm concerned about the on ex and the numbers for the full year 2016 being a place where people are a little disturbed. i don't know if we'll get the numbers now. i think it is a sweet spot for the company. >> how would you trade it now? >> i plan on taking it off tomorrow morning. not because of anything negative. i think the quarter was stunning. tim said it, a billion folks daily. that is a incredible number across the board. double-digit strength everywhere. and the mobile ad revenue continues to grow. everything is going right for them right now. but i still think after the run into this number and now seeing the run after the number, i think it is time to maybe take a pause. >> i think that is a fair point by pete. but operating margins continue to improve. close to 54% now. mobile is now 78% of the
5:04 pm
revenue. and they beat revenue on the desktop side as well. and i think valuation is reasonable. it is on a good move. the good news is it hung on to the gains after google. last quarter google reported a huge move in facebook. and facebook reports, big selloff. you still have the gains now, which i think is encouraging but i think there is nothing wrong with taking money off the table. you've seen the stock do this before. with that said, if you have long-term horizons, i don't think it is that expensive. >> and i'm glad you mentioned foog. does facebook support alphabet? >> are they taking share, is the pie getting bigger? i think the numbers from google were great. so i think the pie is getting bigger. facebook, you know, i don't know what -- outstanding numbers, they've done a great job. wouldn't be surprised if they announce a stock split. which doesn't mean anything. >> but it will work. >> but it will work. the shares will react positively
5:05 pm
to a split. >> and let's bring in the one and only bob peck working the red phone here at the nasdaq market site. what did you make of the quarter. >> great across the board. users accelerating there with mobile, almost 90%. and that is on better apru. and that is growing 30% with u.s. growing as welcome. another indicator. dau increased to 65%. and mobile revenues grow 16% sequentially. people looking for 12% or 13%. and all of this done on better costs with margins showing a leverage of the business model. we'll look for information on the instagram and the video and the buy buttons and today's notify and the cost guidance for 2016, look for investors to focus there. >> in terms of the cost line, are we reaching a point where the cost comparisons year on year are helping the optics of that number. >> it is. and the focus on the street
5:06 pm
looking for 65%. and there is a wide range of guidance for the following year. so that is a concern on how wide the range can be. typically they've done toward the bottom end of the range though. >> we'll check back in with you. bob peck. whole foods tumbling in the after-hours session. jane wells is live from l.a. with the headlines. >> john mackey saying yes, we are going to be competitive on price but first and foremost they stand for the highest quality. said they have the highest quality food in the world and they won't sacrifice that. but the ceo said the company has to, quote, go faster and move deeper to rebuild traffic in sales. they said the 2016 sales will slow to between 3% and 5%. 2015 sales grew 8%. the company said the toughest quarter for comparisons is the current one and comps will be flat. the lower ends of the sales outlook reflects the possibility that comps could get worse
5:07 pm
before they get better with an in flexion point later in the year. now news about the smaller chains called 365, first one supposed to open in l.a. in the next 12 months. regular whole foods stores like the video we have are 50,000 square feet, whole foods is signing leases for the 365 store concept averaging 28,000 square-feet. that is about twice the size of a trader joe's. on the plus side it is buying back a billion dollars worth of shares, the majority in the first half of 2016, increasing the dividend and the guidance fell well short of street hopes. the whole foods is saying it will be $1.50 instead of $1.67. we'll keep you posted on the call. >> jane wells, thank you very much. is this the strategy whole foods should be going after, returning capitol to investors and spending and leasing for the smaller stores while the sales are under pressure. >> i think they have the balance sheet to do both. we had round tripped this one
5:08 pm
and didn't do it well and petey got out at the top. i think this is a brand that does endure. at some point they will get it right. i don't know where it goes in the interim. but i think they can afford to do both. i think 365 could be interesting for them. i'm going to watch. >> okay. >> sales up 6% but the margin is what killing them. i think the 365 concept makes sense. i didn't get out at the top. i got luggy. and john and i had a debate today and i brought up kroger. yes, it is stealing something from them but that will focus them into being that much more competitive. and when you talk about the 365 stores, without as much footprint, i think that is something very good for whole foods going forward. >> it is true, when you just go into the whole foods store, it is like a time commitment. i'm going to go into the store and spend 15 minutes in the store. >> they want to defend the brand and say the customers are different. they have to believe that. because target and costco is in
5:09 pm
the space too. everything is jumping on this. this is part of a re-set not done yet. and i think a buyback does not overcome the fundamentals which are still weak to me. up next, a live shot of capitol hill where in moments we'll hear from senators claire mccaskill of missouri and collins of maine. they are looking into drug pricing. and the two dirtiest word in all of media. cord cutting. what will bob iger say about it tomorrow. a top analyst with a bold call. and later janet yellen signaling that a december rate hike is in fact on the table. but don't worry. we'll tell you where to put your money to work now before the fed makes a move. all of that and much more ahead on "fast."
5:10 pm
5:11 pm
5:12 pm
welcome back to "fast money." biotech stocks getting hit today as the senate opened an investigation into the drug pricing in the pharmaceutical industry. the two senators join ug from capitol hill. senator claire mccaskill from missouri and susan col frinz maine. it is a pleasure to have you on the show. >> thanks. >> and senator, since you chair the committee, what is the focus in terms of the types of drugs seeing the increase. is it the drugs on market for years and consequently see a
5:13 pm
price increase once they are acquired by another company or is it drugs that come out to market that could arguably be said to be very expensive? >> our focus are on drugs that have been the subject of very sudden, aggressive price hikes that have been on the market for years and in some cases for decades. sometimes they've been acquired by another company that immediately increases the cost of the drugs. these are drugs that have a real impact on our seniors, on health care in general, on our health care providers. and this is a serious bipartisan investigation to understand the causes, the impacts and the possible solutions. >> currently all of the drug price increases have been highlighted by you as well as the media. all of them have been legal. so senator mccaskill, how do you go about thinking about
5:14 pm
legislation that will contain the drug price increases. >> well very carefully. chairman collins insists and i certainly agree that we are not interested in a sensational witch hunt here. we want to go slowly and methodically and understand the facts. but there is something that is not right when merely by acquiring a drug and changing a label, one that maybe doesn't have a lot of competition in the market because it is not widely used, that companies may think they could get away with exorbitant -- i mean thousands of percent increase in prices just when they change the label. that -- that i think is something we need to understand, why this is happening and is this a thoughtful price hike or is this someone thinking no one is looking and they could just get away with it. >> and while -- it is legally okay do this, of course, arguably ethically it is an awful thing to do, especially to the patients paying for the drugs. but let's take dara tram which
5:15 pm
came under the spotlight because of turing pharmaceutical after they acquired the drug significantly. in that case there aren't other companies willing to step in and make this drug either. so senator collins, how do you make sure that drug companies are still willing to carry the mantle of the drugs that no one else wants to manufacturer. >> well first of all, i think it is important to understand that some of the companies that we're looking at do absolutely no r&d. so it is not like they are reinvesting the proceeds from the drugs that they have on the market into developing new life-saving treatments. these are drugs that have gone off patent and been around for a long, long time, that have been acquired by another company that hikes up the cost. and we want to understand why. this may represent a market failure.
5:16 pm
maybe it is too difficult for competitors to get into the market. maybe it is too difficult for foreign companies that would be interested in making this kind of pharmaceutical to get fda approval, those are some of the questions we're going to be asking. and i hope answering. >> you've requested documents and information from valeant, turing and retrofin and rod elis. and it has besieged by other issues but the issue has been felt dearly by valeant which lost 50% of the market capitalization. do you feel that is a victory because the ceo on the conference call after the earnings report indicated he will back away from price increases as a primary method of driving revenue. do you feel like you've -- you have a partial victory in this, the drug industry is saying, you know what, we're going to back down a bit? >> well, ironically, that ceo was in front of another
5:17 pm
committee i serve on and the subject of the committee that day was tax policy. and we were looking at m&a in the context of the taxes in this country and trying to figure out how to fix the tax code to incentivize the companies to keep capital in the united states. but in the hearing when i asked him the question about the ridiculous large price increases for this very limited drug used in a hospital setting only, the answer i got was kind of a ba-ba-ba. and that is an indication you have to look deeper and dig harder. so perhaps we're exposing a pattern of certain people acquiring companies just because they feel like there is one drug there they can get away with an exorbitant price hike when no one is looking that has nothing to do with r&d investment. that is what we're trying to figure out. >> senators, we appreciate your time on a very important topic. thank you. >> thank you. >> thanks a bunch.
5:18 pm
>> senators mccaskill and collins joining us from the capitol. how do we trade this. we saw valeant shares down 6% and retrofin down 13% today so this is a weight on the sector still. >> i'm still -- you have to stay away from valeant. i think you are coin flipping here. there will be a shakeout at some point. i don't think you've seen it this. allergan reported today, ridiculously strong quarter. >> nice call by you, by the way. >> except the stock traded down today. the price wasn't great. maybe because people are concerned about margins coming in a tad. but i have to tell you, there is still a lot of game left in the allergan and pfizer story and potentially somebody else. >> i'm with gee, you have to stay a -- away from this. you look at the debt. there is so much debt at valeant. this is a levered company. more bad news, that will happen for a while. >> i have a position in valeant but a put against it so i'm
5:19 pm
protected on the bad side. but i would give a headline to the deutsche newspaper where they say every stock has its price but timing is everything. so when you look at the stock, they were bearish in terms of the sustainability of the pricing strategy and the m&a but said at this level substantial skepticism is priced into the business model which we talked about and the potential that the pricing has to change. so valuation-wise, this company is very attractive here. >> you would step in even with this investigation? >> i said i have a long position with a put against it to the down side which is the only way to play it. >> still ahead. how nervous sh disney shareholders be nervous about today's time warner results. one analyst says why. we'll explain that after the break. i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide. here is what else is coming up on the show. >> december would be a live possibility. >> it's alive. >> and if the fed hikes rates, we'll tell you where to put your money right now. and later -- you might be
5:20 pm
able to afford more than that, because prices at the pump keep falling. and we've got the four stocks that could pump up your portfolio as a result when "fast money" returns.
5:21 pm
5:22 pm
♪ there are no medals won for earning a living. it's just what you do for family. but it's hard to build a future if you can't see past today. that's why walmart is investing in the most important part of our company - our people. because a raise in pay, raises us all. ♪
5:23 pm
welcome back to "fast money." i'm jon fortt with an update from the qualcomm earnings call. the ceo and others outlining a few challenges that qualcomm is facing. declining average selling prices of smartphones, providing some pressure. also chinese smartphone manufacturers not reporting all of the devices they should be, qualcomm believes, and thus not delivering the licensing revenue they expect to see. they have a plan to retrieve that. but they have a worse case scenario and best case scenario about how quickly they could do that. and talking about the over all smartphone market and saying low end and mid range phones are doing well particularly at one large oem or one large manufacturer. often when they say that, that means samsung. and also saying that over all in the market, across various geographies, the lower end phones are doing well. that raises questions about the market for qualcomm's higher end chips that the company is
5:24 pm
projecting in the second half of the year, margins will get better and heavens will improve because of the launch of the upcoming snapdragon 820 chip which has been well received thus far and received commitments from several manufacturers, melissa. >> john, thank you. how do we trade qualcomm at this point. they won't give guidance any more. >> you don't. unless you are trading it for a break-up value right now, and they talk about everything happening over the next couple of quarters before they see the benefits of that. i think because of that, you would be in something like texas instruments or intell. but right now, unless they decide they are willing to listen to the activists to split up, i don't see the value. >> the first quarter guidance was ridiculously bad. and it is again, having to have nuts. pete said texas instruments. go back a week and a half and look at what they say and put it over what qualcomm just said. it is like they are in two different worlds. so buy the companies doing it right and selling the ones that are doing it wrong and
5:25 pm
unfortunately qualcomm is doing it wrong. and a disappointing earnings outlook for time warner, with cord cutting and sending disney shares after bob iger mentioned court cutting on the last earnings call. could it spell trouble for disney which reports tomorrow after the bell. rich bell joins us on the "fast" line. rich, these are two very different companies, how much of a read-through is it? >> look, the consumer is changing their behavior. there is a seismic change in consumer behavior that is effecting the entire media sector. this is not just a disney or time warner issue or discovery issue. every one of the companies is facing the issue that consumers are less and less interested in watching live linear television and that is effecting not just advertising but the price value of the bundle. i mean $80 a month for a lot of channels you don't watch, it gets harder for consumers to digest. consumers are not dumb. they are making decisions and
5:26 pm
more of them are cutting or shaving the cord an it is effecting every one of the companies in the sector. >> so is this yet another nail in the coffin for most of the sector that you cover, or is this another data point that proves that this industry will be going through a long, drawn out sort of transformation. >> i think the latter. at the end of the day, you need to make very significant investments. this industry is not built to do direct to consumer. they don't have the technology chops. i mean think of it. you don't graduate from stanford and work at viacom or discovery to build apps. this whole industry needs to reorient itself and invest heavily in great, must-watch programming and build the technology to actually, you know, go direct to the consumer and support that. remember, customer care, there is a 1-800-tnt or a turner, they need to build customer care and service operations that none of these companies have and it is
5:27 pm
really why we've continued to tell investors to buy netflix. it has been our favorite idea on the media space. we also love facebook, which just reported great numbers and you can see how the subscription and the advertise dollars are migrating to new players and away from the incumbent legacy players. >> we have to let you go. thank you rich greenfield. >> bob iger will be live on "closing bell" tomorrow. and the bottom line is he said time warn ser a read through disney which we'll be getting tomorrow after the bell. tim, where do you stand. >> disney is more diversified. time warner, the guidance overshadowed good numbers. so maybe disney has gotten some of this out of the way. if you look at the company and we are looking at parks and studio and there are reasons including star wars that people think this could be resilient. and in terms of content. disney has content galore.
5:28 pm
so you don't have to do a lot. this is a stock, as an investor, you are holding. >> jane wells is in l.a. with the latest from the earnings call. >> the call still going on. john mackey, co-ceo, said if we have a magic bullet, we've shot it. they said whole foods has to get back to basics, better services and cutting costs. here is what he had to say about coming cost cuts. >> we are committed to a fundamental restructuring of the cost side of our business. and have already taken steps in this direction. we have a plan to reduce expenses by a $300 million run rate by the end of fiscal year 2017. >> now, other initiatives to further differentiate themselves from everyone else who is selling organic, they are going to expand the offerings and have a culinary head and do more promotion and invest in technology to stream line the
5:29 pm
shopping experience and improve efficiency. and they will grow at a modest pace to lessen the effects of cannibalize is. and the question is why are you doing stock buybacks and get your comps going. they said the stock price right now is a compelling buy. so they have announced a $1 billion stock buyback. most of that is going to be done in the first part of the year. one interesting thing, nobody is actually sort of nailed down what the adjusted earnings per share is for the last quarter. they reported a gaap earnings of the 16 cents. it included 14 cents worth of noncash impairment charges an restructuring costs but nobody wants to say that it is 30 cents a share adjusted. and the street was looking for 34 cents. we haven't them come out with what they want to call at justed eps for the quarter. jane wells in los angeles. thank you. i think at this point, that doesn't make that much of a difference. >> no. it is going forward. >> for the trajectory of the company. >> if there was a silver bullet, we would have used it.
5:30 pm
but $300 million is a fair amount of money, after tax base that might be 50 cents a share. they have their work cut out for them. i think you have to let it shake out a bit. >> up next, janet yellen shacking the markets by hinting a december rate hike could be in store and we have a trade to make you money if the fed moves or doesn't month. win-win right. and we'll hear from the ceo mark zuckerburg right after this. [ male announcer ] eligible for medicare?
5:31 pm
that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients... plus, there are no networks, and virtually no referrals needed. join the millions who have already enrolled in the only medicare supplement insurance plans endorsed by aarp... and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide.
5:32 pm
it's gotten squarer. over the years. brighter. bigger. thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv.
5:33 pm
welcome back to "fast money." here is what is coming up in the second half of the show. janet yellen spooked the marketsar she said a december rate hike was a quote, unquote, live possibility. and we have a way to profit if the fed moves or doesn't move. we'll explain. >> >> and call it a case of low-venber. the four stocks that stand to rally the most. but first back to the big story of the hour. facebook popping in the after hours. that call now half way through. julia boorstin is live in san francisco with the latest from the call. julia. >> that is right, melissa. mark zuckerburg kicked off the call by talking about momentum in the mobile use in particular. saying that facebook is using to
5:34 pm
improper the core product to grow engagement and saying that video is exploding. it is popular for users and marketers. daily video views have doubled since april. >> there have on average 8 billion video users daily. and to offer more engaging video experiences we added live video for public figures an we now support interactive 360 videos and news feed. >> just moments ago cfo david wayner warned that facebook will continue to face currency headwinds in latin america and capital expenditure would be in the 50% range, down from the prior range of 50% to 55%. on the call zuckerburg also talked about the priority that the company is placing on getting more people connected to the internet, that of course means more potential facebook users. he warned investors to be patient with facebook investment in oculus saying it could be the
5:35 pm
next computing platform that changes our lives but it will grow shely and facebook is committed to it for the long-term. melissa. >> julia, thank you. let's bring bob peck back in. er monitoring the call from the red phone. what are the high lites in your view. >> one is the cost narrowing and greater toward the lower end range. and revenue is being driven by pricing, set by the advertisers. and the takeaway is they haven't started monetizing the 4 million users on instagram. 700 million on messenger. there is a lot of runway to go for the company. >> bob. jump back on the call. and zuckerburg said at 1 billion users will start monetizing properties and it is on the cusp of that and we haven't heard that. >> and we are seeing that and potentially oculus is something that stood out. so you look down the line in the pipeline, just like drug companies, the pipeline at
5:36 pm
facebook is absolutely extraordinary, the other big story of the day, these words uttered by fed chair janet yellen. >> with the committee has been expecting is that the economy will continue to grow at a pace that is sufficient to generate further improvements in the labor market and to return inflation to our 2% target over the median term. and if the incoming information supports that expectation, then our statement indicates that december would be a live possibility. but importantly, that we've made no decision about it. >> those words pressured stocks and bonds so if the fed does move where should you put your money. ethan penner is a pioneer, created and run a commercial mortgage business in the 90s. traders wanted to be here and
5:37 pm
rivals revered him and feared him. now he is at mosaic real estate investors. welcome to the show. great to have you with us. how do you think about a quarter point rate hike. but the market thinks it is going to be the end of the world. the most cataclysmic event in the markets since i don't know when. >> well, i think that we're living in the weirdest of times, right. and i know you guys probably talk about that all of the time. but us, in the real estate world and in the investment world, every single meeting, every single conference, every single luncheon and dinner centers around will rates go up and when will they go up and how high will they go up. it is the boogie man that everybody has feared for six years. and i listen to the clip, i heard what janet yellen said today. and i also find it almost laughable that people pay attention any more. like why is she even on tv and who is listening to her. the fed has been wrong -- no one has ever been this wrong. it is like a football team going 0 for 16.
5:38 pm
and so with fed projections about everything, from gdp to what rates would be, they have been consistently wrong, like a winless team in the nfl. and i think that, you know, the proclamation that anything is possible but we haven't made a decision is more no news. and for markets to move on that, it is irresponsible for her to say anything, right. so i think that investors today, from my perspective, when i look at it, for myself, i need to make investments rather than bets. like i don't want to bet on whether she will move rates or not. i want to win either way. i want my retirement savings to do well either way and i think investors need to think about protecting themselves from both the possibility that we're in a japan style economy for 30 years where rates don't go up at all or much or the possibility that all of a sudden, for no reason at all, we have inflation and very high rates. either one of those -- no one
5:39 pm
really knows what will happen. >> right. and that is why i think that the three buckets of reads that you brought are so interesting because it is sort of like an all-weather portfolio in this uncertain world. commercial mortgage reits are one and what do you like. >> commercial reits in the private sector, which what i run, to me you are very well insolated against either of the extreme scenarios that one should fear. if rates go up meaningfully, most of the loans made in either of those two companies portfolios and i would extend it to a couple of other names and those are the biggest well-run companies an the same thing in my business, is our maturities are very short. our loan to values are reasonably low. and so if rates were to go up, it wouldn't matter because we're earning a high spread relative
5:40 pm
to other incomes. someone today could buy starwood stock and get a higher than 8% dividend yield. it is amazing. so what if rates went up 50 basis points. who cares. the dividend yield is attractive even in an environment where rates are higher. they are insolated very well against credit losses because the loan to value is lower as is the case in my business. and i think that if rates go up meaningfully, they'll be able to reinvest at still higher rates as the maturities come due. so i feel very good the stocks are good investments for people long-term. and it is true that when miss yellen comes out and said something, their stock may trade off in the moment. but people should be buying these for the long-term holds. >> ethan, it is great to have you here. we hope you'll come back on the show. >> thank you, melissa. >> and you don't listen to yellen at all, let's be clear. oh, you listen. all right. even better. thank you. >> thank you very much. >> karen, how do you think about rising rates in this space. >> well, i love to hear what
5:41 pm
ethan has to say. >> of course. >> market freaking out and capitol could leave the reit space even if everything is healthy and nothing changes. so that could be a great opportunity. i've been looking around hoping to find a retail reit to short-term because we talk about traffic declining everywhere, that is what we're looking for right now. >> gee? >> i think the transtorty move in energy is anything but. and i think anything she says makes the dollar go higher and the commodities go lower which is bad for many reasons so i think rates are headed lower despite the move. >> i'm going the other way. i think people are not positioned for the fed to do anything in december. because of what ethan said. because crying wolf or fire in a theater, but we're in a place where the fed has given themselves every possibility to move. guy said the effects in energy are transitory and i think they are and i think underutilization in the labor market is starting
5:42 pm
to go away and i think the equity market is not positioned. and i believe in fixed income instruments, rates will barely move. after they move a little bit. but equity markets have priced in the fact that it is going to be a forever time where the fed is going to be their friend and that is not the case right now in the markets move and positioning. >> quickly. >> i look at the pharma space. and it is not because it is defensive. you look at the pipeline and the growth and the numbers. they are doing very, very well. and plus you get yield. >> up next, good news for the consumers. prices at the pump are falling so what should you be doing with the money. we have the next big decision next. and shake shack ahead of earnings tomorrow and we'll tell you what has them so excited when "fast money" comes right back.
5:43 pm
5:44 pm
in panama, which is a city of roughly 2 million people, we are having 5,000 new cars being sold every month. this is a very big problem for us with respect to fast and efficient transportation. it's kind of a losing proposition to keep going this way. we are trying to tackle the problem with several different modes. one of them is the brand new metro. we had a modest forecast: 110,000 passengers per day in the first line. we are already over 200,000. our collaboration with citi has been very important from the very beginning. citi was our biggest supporter and our only private bank. we are not only being efficient in the way we are moving people now,
5:45 pm
we are also more amicable to the environment. people have more time for the family and it's been one of the most rewarding experiences to hear people saying: "the metro has really changed my life." triple-a out with a report saying the national average at the pump is $2.20 a gallon. the lowest average since 2004 and our next guest says it is going slower. tom close is from the oil price information service which tracks the industry. great to see you. >> nice to be here. >> does this mean that crude oil is going lower as well or what are -- how do you think about gas prices going lower?
5:46 pm
>> well i think gas prices are going lower. they started in november with a little bit of a wobble higher but they'll end november with lower numbers. and they don't really depend that much on crude oil this month. we saw something a couple of weeks ago where the price of gasoline was below 2.20 and the price of diesel was below 2.50 and the last time that happened was in 2009 when the crude oil prices were $57. so as the days get short, the gasoline prices get shorter and it is also happening for diesel, jet feel, heating oil, propane, you name it. >> so 2.20 right now. how low do think we go in november. >> i think most consumers would buy for $2 or less in the next 60 days or. so i don't think we'll see great, great drops in the national average but most people don't buy at the average. they buy at a cheaper number. so for a particular motorist, it means having about 45 or $50 more to spend this november than last. for people in the heating oil
5:47 pm
side, they have hundreds of dollars more this winter than last winter. >> it sounds like it is great for the retailers and i know you don't cover them and that is not your forte but you've talked about the ripple effects of who sees the benefit the most and where do you see the next ripple because this seems like a leg lower for gas prices. >> yeah, i think refiners will look really bad, probably in the next four or five weeks. but they're going to do great next year. because we're going to have a gasoline spike at the end of the first quarter. i think retailers will do very, very well. so people in the c store business -- there is master limited partnership in c stores an the mlp area has been sort of thrown out with the bath water here. so there is going to be some beneficiaries and consumers are the biggest ones. >> tom, we'll let you go. thank you so much. >> take care. >> tom close. so $2 or lower a gallon. that is a huge leg lower. guy -- >> yes. hello. >> you said refiners won't look
5:48 pm
so good in four or five weeks. >> maybe. but tom has been right. but he said that before about refiners and there will come a point where they get squeezes but not yet. as the emp market gets squeezed, that helps refiners. all-time high in tessoro and valero at an all-time high. there is a curve on some economics chart where you do this and one crosses the other and point of diminishing margins over returns but we're not there yet sister. >> so what are the best cheap november fuel. i went out of order. tim. >> i'm not going to get into the consumer because that is a big debate. royal dutch shell. and they are starting to perform after a couple of years of being a disaster. people thought though the bg acquisition was a disaster and look at that. >> ridiculous. >> i look good behind the wheel. ultimately it is a case -- >> where is enso. >> you wanted to go for that.
5:49 pm
[ laughter ] >> okay. go ahelp. keep talking. >> 7% dividend yield for a company that i think also the refiners, and the weaker euro benefits the refineries over there. >> pete. >> tom was talking about the cheapest thanksgiving since 2004 and one of the areas he went to was jet fuel. and i go there as well. and the delta quarter. 52-week highs yesterday, $52 it hit. it pulled back from that. but when you look at what they did the last quarter. saved a billion dollars based upon where oil was a year ago quarter and it says something. and they did buy the refinery and put another $87 million in their pocket. so delta and the airlines are doing well with the fuel levels. >> karen? >> yes. well when i thought about this, i looked at what got hurt when oil spiked. anyone who made suvs. and they were too expensive and nobody bought them. if it is here for a while. suvs, high margin, that would be good for gm. >> everybody is in the same car. >> karen looks like one of the
5:50 pm
go-gos. >> we are all one of the go-gos. >> belinda carlyle, got to be in the car, but i don't. top close is right but he is not right now. >> there you are. >> i'm just repeated what i said. >> valero. >>i rock, t top, whatever. >> i'm moving on. shake shack still ahead with earnings out tomorrow. why traders say the stock could surge by the end of the week. you're watching "fast money" on cnbc, first in business worldwi worldwide.
5:51 pm
5:52 pm
5:53 pm
welcome back to "fast money." fire eye and bojangles bouncing after hours. seema mody is at headquarters with the story. >> let's start with fire eye. it is a fast growing cyber security companies. while it did post a 45% jump in revenue it did miss expectations on top line which shows how high the bar has been set for these type of companies n. addition to missing topline estimates it lowered the billings guidance for q4 citing weakness in europe. and the stock is tanking after hours, down 13%. a different story for bojangles. surpassing wall street expectations on earnings and revenue.
5:54 pm
impressive comp sales, up 4.1% in the quarter. it also raised the 2015 guidance. the big question going forward, according to analysts, is whether mcdonald's the all-day breakfast menu is a future threat to bojangles but at this point that doesn't seem to be the case. right now up 4.6% after hours. melissa. >> seema, thank you so much. two very different stories here. guy, take fire eye. >> i thought the reversal was a great indicator into the earnings release. i don't think it was a disaster. the guidance was down 12%. i've been wrong. better hold 26 tomorrow the october low. >> who wants bojangles. >> i do. fried chicken and biscuits, gets you done. nice job by bojangles. qsr and fast food, people employed with money from low gas prices. >> nitty-gritty. >> that looks delicious by the way. shack shack reporting tomorrow after the bell and traders expecting a huge move from the stock. mike kuo is in chicago with the
5:55 pm
action. >> hey, this is a name, because it ipoed rlively recently. the last three quarters it didn't move that much. just under 5%. but the options market is expecting a move of about 9% in the shares by the end of the week. and we saw that double the average daily call volume. and this with a whole other options trading day tomorrow when they report tomorrow. the weekending 50 strike calls. buyers paying $1.65 on those based on when the stock was trading at the time this happened they were betting the stock would be up at least 6% and likely much more by this coming friday. >> thanks mike. good to see you. for "options action," check out the full show 5:30 eastern time on friday. up next, traders tell you what they are watching for tomorrow right after this. stay tuned. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on?
5:56 pm
let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.
5:57 pm
there are no medals won for earning a living. it's just what you do for family. but it's hard to build a future if you can't see past today. that's why walmart is investing in the most important part of our company - our people. because a raise in pay, raises us all. ♪
5:58 pm
quick programming note. barry diller, the chairman of expedia will be on "squawk box" tomorrow at 8:00 a.m. talking much more about expedia, home away, the deal the two entered. that will be must-see tv tomorrow morning. time for the final trade.
5:59 pm
guy, we're start with you tonight. >> the whole foods loss works for kroger. i have to get out of here, people. >> karen. >> kors. today it was -- it was trading like it was the end of kors. absolutely not. rumors of their death greatliage rated. think it is better today. >> wait a second. hold on. >> ohhhh. >> a little birthday. mel's birthday. >> happy birthday to you. happy birthday to you. cha cha cha happy birthday dear melissa lee, happy birthday to you. >> guys are so great. thank you. thank you. that is why you had to leave. that was a ruse. final wish, pete. >> to a good friend of mine fred
6:00 pm
mcneal who passed away. but go with gilead for the final trade. >> happy birthday, mel. after a move from 130 to 200, i'm taking profits in this blue chip chinese adr. >> and ourbob. i'm melissa lee. thanks for watching. "mad money's" up next! >> my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to save you a little money. my job is not just to teach but to educate so call me at 1-800

18 Views

info Stream Only

Uploaded by TV Archive on